Kreps Model

The Kreps Model, developed by David Kreps, is a framework in game theory and economics that explores how people make decisions over time, especially when considering their future preferences and plans. It highlights the importance of self-control and how current choices can affect future outcomes. Essentially, the model demonstrates that individuals often consider not only immediate rewards but also how their current actions align with long-term goals, which can help explain behaviors in situations like saving money or making investments. It provides insights into the complexities of decision-making under uncertainty and changing preferences.